Virginia
Tax Attorneys

Offers in Compromise

The offer in compromise (OIC) program is administered by the Internal Revenue Service (IRS). An offer in compromise allows individuals to settle their tax debt for less than the full amount owed.

The IRS considers various factors such as a person’s ability to pay, income, expenses, and asset equity when evaluating an offer. To be eligible for an offer in compromise, individuals must have filed all required tax returns, made all necessary estimated tax payments, not be in an open bankruptcy proceeding, have a valid extension for the current year return, and have made tax deposits as an employer for the current and past two quarters.

In cases where the IRS cannot process an offer in compromise, the agency returns the application and offer application fees. Different payment options are available for accepted offers, including lump sum cash payments or periodic payments over a specified period.

Low-income individuals who meet certain certification guidelines may not be required to pay the application fee, initial payment, or monthly installments while the IRS reviews their offer.

If an offer in compromise is rejected, individuals have the right to appeal within 30 days using the Request for Appeal of Offer in Compromise, Form 13711. The IRS Independent Office of Appeals can provide additional assistance during the appeal process.

It’s important to note that navigating the offer in compromise process can be complex, and seeking the guidance of a tax professional, such as a tax attorney or enrolled agent, is often recommended to increase the chances of a successful outcome.

IRS Audit Defense

Audits are conducted by tax authorities to ensure compliance with tax laws and regulations. In Virginia, the Department of Taxation conducts audits to verify tax compliance. It is not uncommon for audits to result in no additional tax liability or even a refund to the taxpayer.

When it comes to audits, both state and federal tax authorities, such as the IRS, may be involved. Audits can be triggered by various factors, including math errors, failure to report income, or failure to report foreign accounts.

Receiving a notice about an audit often leads to subsequent notices regarding penalties, if applicable. It is advisable to seek legal assistance promptly upon receiving an audit notice to ensure proper guidance and representation throughout the audit process.

IRS audits generally have a time limit of three years, during which the agency can review past tax returns. However, exceptions can be made in cases involving significant errors or fraudulent activity.

Anderson Bradshaw is a firm that specializes in handling tax audits and can provide assistance and representation in such matters. It is important to keep in mind that tax laws and procedures can vary.

Innocent Spouses

Innocent spouse relief is a provision that applies to couples who file joint tax returns and are still married and living together in the same household. It allows one spouse to avoid paying additional taxes when the other spouse understated the taxes due on their joint return, and the innocent spouse did not know about the mistake.

Underreporting of taxes is attributed to only one spouse, and the audit report should reflect this attribution. The innocent spouse seeking relief must demonstrate that they had no actual or constructive knowledge of the tax understatement, and it would be unfair to hold them responsible for the resulting tax debt.

It’s important to note that there is a time limit for seeking innocent spouse relief. Generally, it must be requested within two years after the IRS has initiated collection actions. However, each case may have its own specific circumstances and requirements, so it’s advisable to consult with a qualified tax attorney or professional for personalized guidance.

Obtaining innocent spouse relief from the IRS can be a complex process, and the agency evaluates each claim carefully. Therefore, it is highly recommended to seek the assistance of experienced legal counsel when pursuing an innocent spouse relief claim to ensure the best possible outcome.